Loading judgment…
Facts
The assessee, Dawoodi Bohra Jamat Veraval, filed an application for registration of the trust under section 12AB of the Income Tax Act, 1961. The CIT(E) rejected the application, stating that the assessee failed to provide documentary evidence to satisfy the genuineness of its activities and that the application was not filed within the prescribed due date.
Held
The Tribunal noted that there was a delay of 234 days in filing the appeal, which was attributed to the assessee being a senior citizen, less educated, and unaware of online compliance systems, relying on an accountant who left the job. The Tribunal condoned the delay, holding that the circumstances were beyond the assessee's control and there was no mala fide intention. The Tribunal also noted that the assessee was not given a proper opportunity to be heard before the CIT(E).
Key Issues
Whether the CIT(E) erred in rejecting the assessee's application for registration under Section 12AB due to non-compliance and delay in filing, and whether principles of natural justice were followed.
Sections Cited
12AB, 12A(1)(ac)(iii)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAJKOT BENCH, RAJKOT
Before: DR. ARJUN LAL SAINI & SHRI DINESH MOHAN SINHA
आदेश / O R D E R PER DINESH MOHAN SINHA, JM:
Captioned appeal filed by the assessee, is directed against the order dated 20.05.2023 passed by the Learned Commissioner of Income Tax (Exemption), [in short “the ld. CIT(E)”], Ahmedabad wherein ld. CIT(E) rejected assessee’s application filed in Form No.10AB under the income tax Act, 1961 ITA 145/Rjt/2024 (AY: NA) Dawoodi Bohra Jamat Veraval v. CIT(E) holding that assessee has failed to satisfy about the genuineness of the activities.
Grounds of appeal raised by the assessee are as under: 2.
1.) The grounds of appeal mentioned hereunder are without prejudice to one another. 2.) That the learned Commissioner of Income Tax (Exemption), Ahmedabad has erred in law and on facts in refusing to grant registration u/s 12AB of the Income Tax Act, 1961. 3.) Your Honour’s appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing.
3. There is delay in filing of appeal by 234 days, the Ld. AR submitted that delay is caused due to the assessee is a senior citizen and have 68 years of age and less educated and was completely unaware about the online systems of compliance and for which he relied upon the accountant who could not timely inform assessee and had left the job which has resulted into delay in filling appeal before us. Ld. AR of the assessee prayer to condoned the delay to filing the appeal.
On the contrary, Ld. DR has not objected to the request of the Ld. AR of the assessee.
We note that the in view of the above-mentioned circumstances, it is clear that delay is not due wrongly committed by the assessee but the circumstances are beyond the control of the assessee. According to the Hon'ble ITAT, Rajkot Bench in case of Shakti Clearing Agency (P.) Ltd. vs. ITO (80 TTJ 668) has also held that; ITA 145/Rjt/2024 (AY: NA) Dawoodi Bohra Jamat Veraval v. CIT(E)
"The assessee would not gain anything by filing the appeals late. There was no mala fide imputable to the assessee. The delay in filing the appeals was a result of negligence or inaction on the part of the tax consultant. In every case of delay, there can be some lapses of the litigant concerned. That alone is not enough to turn down the plea and to shut the doors against him. If the explanation does not smack of mala fide or it is not put forth as a part of dilatory strategy, the Courts must show utmost consideration to such litigant.”
We further note that there is sufficient cause in filing the appeal in time. Therefore, we condoned the delay of 234 days and the appeal to be heard on merit.
Facts of the case are that the Zakirhusain F. Vhora manager of Dawoodi Bohra Jamat has apply for registration of the trust u/s. 12AB of the I.T. Act, 1961 was filed electronically and as per data available in ITBA, the same is filed on 24/11/2022 by the assessee in Form No. 10AB under Rule 17A of the I.T. Rules, 1962. The Rule 17A(1) of the Income Tax Rules prescribes the different forms to be filed and the detail of Form filed are under; Sr. No. Particulars Form No. Date 1. Application for registration 10A 03.02.2022 2. Provisional Registration Form AY 2022-23 to AY 2024-25 10AC 10.02.2022 3. Application for permanent registration 10AB 24.11.2022 4. Rejection of Permanent registration 10AD 20.05.2023
A notice was issued by the Ld. CIT(E) to the assessee on 17/02/2023, sent through ITBA Portal on the e-mail address given by the appellant Trust/Institution in its online application, with a request to furnish details note ITA 145/Rjt/2024 (AY: NA) Dawoodi Bohra Jamat Veraval v. CIT(E) on the activities actually carried out by the trust as well as certain details/documents as mentioned there. In response to the said notice, the assessee had not furnished any detail/document. Therefore, following the principle of natural justice, another opportunity was given to the assessee by issuing notice on 25/03/2023, sent through ITBA Portal to furnish certain details mentioned therein. No response given by the assessee. That the Ld. CIT(E) has perused the application for registration and the details filed by the appellant alongwith the application for registration is peripheral and cryptic in nature. The assessee has not submitted declare Notes on activities conducted by the Trust. since inception, copy of bank statement, identity proofs of main/managing trustees, undertaking u/s. 11(4) or 11(4A), 13(1)(c) & 13(3), 2(15), 12AB(4) of the Act and undertakings regarding adherence towards all the requirements of law as are material for the purpose of its objects as enumerated in the trust deed, details regarding donation received & paid, if any. The assessee/applicant has not submitted its annual accounts for F.Ys. 2020-21 & 2021-22. In spite of specific requisitions, the assessee has not submitted the requisite details. Therefore, no verification of the objects as per the constitution/deed with the activities could be carried out. Thus, the genuineness of the activities does not get established, due to non compliance by the assessee. Section 12AB makes, it very clear that before granting registration under this section, the Commissioner has to satisfy himself about the genuineness of the activities of the trust or institution and also he has to verify that these activities are in consonance with the objects of the trust or institution. Further, he has to ensure that other laws material for the purpose of achieving objects are complied with. The assessee has again not furnished any detail The Ld. CIT(E) has rejected the application for registration with further observation:
ITA 145/Rjt/2024 (AY: NA) Dawoodi Bohra Jamat Veraval v. CIT(E) “From the above discussions, it is evident that the assessee has failed to file documentary evidences to enable me to satisfy about the genuineness of its activities and to verify these activities are in consonance with its objects and has also failed to prove that they have filed the present application in Form 10AB u/s. 12A(1)(ac)(iii) of the Act, within the due date prescribed therein. Therefore, the present application filed in Form No. 10AB u/s. 12(1)(ac)(iii) of the Act is rejected.”
That the assessee has filed an appeal against the impugned order of the Ld. CIT(E) before us.
During the course of hearing, the Ld. AR of the assessee submitted the under-mentioned documents before this Tribunal and prayed for one more opportunity to be given to the assessee to present his case before the Ld. CIT(E). i) Form No. 10A (Application for registration on provisional registration or intimation or approval or provisional approval) ii) Form No. 10AC (Order for provisional registration) iii) Form No. 10AB (Application for registration or approval) iv) Registration Certificate v) Audited Accounts
On the contrary, Ld. CIT(DR) for the revenue relied on the judgement of the Ld. CIT(E) and not objected the prayer of the Ld. AR.
We have heard both the parties and perusal the records available. We note that the Manager of the trust is an old and illiterate man, and don’t well conversant with the registration of Trust laws and the person who was working with the assessee, who is looking after this issue, has left the job, and the ITA 145/Rjt/2024 (AY: NA) Dawoodi Bohra Jamat Veraval v. CIT(E) assessee could not avail the opportunity of being heard before the Ld. CIT(E). We further note that, according to the order, notices were only sent to the assessee and the order does not speak about the services of notice upon the assessee. It is settled law that principles of natural justice and fair play require that the affected party should be given an opportunity to represent case, before the authority. In the interest of justice, we set aside the order of Ld. CIT(E) restore the matter back to the file of Ld. CIT(E) for de novo adjudication in this matter and pass a speaking order after affording due opportunity of being heard to the assessee, who in turn, is also directed to submit the relevant documents before the Ld. CIT(E).
In the result, appeal filed by the assessee is allowed for the statistical purpose.
Order pronounced in the open court on 14 - 02 -2025